Vancouver Accounting Firm | Top Reasons Why Incorporation Is Beneficial
Often, when people start a business for the first time according to their Vancouver accounting firm. They are operating for the first few months, or even longer as a sole proprietor.
However, if people want to accumulate wealth in their business. They should talk to their Vancouver accounting firm about incorporation. Because they are going to be able to save a lot more money. And accumulate wealth quicker. If they are they incorporated business.
The reason why, is because when people are sole proprietors, their business wealth will be taxed at whatever personal tax rate they are going to have to pay. Which in British Columbia, is currently fifty-three point 5%.
Which means if an entrepreneur that owns a sole proprietorship. Has to pay taxes at the top personal tax rate. Over half of all of the revenue that they generate in their business. Will go to the government in taxes.
And if they incorporate, they will only have to pay 11%, because that is the Canadian corporate tax rates. Therefore, if the soul goal for entrepreneurs. Is to save money for the future. They should definitely incorporate their business as quickly as possible.
However, many entrepreneurs think that incorporating is going to be very complicated and a long drawnout process. However, they often can get incorporated the very same day they visit their Vancouver accounting firm. Therefore, business owners should not be scared away by becoming incorporated, because it is not complicated.
The next reason why business owners can benefit from incorporating their business. Is because they are going to be able to protect their legal tradename. Many entrepreneurs go to corporate registries. In order to register the name that they are going to be operating their business by. Thinking that it will legally protect the name.
Unfortunately, this is not true. Simply because registering the name does not legally protected. And it will not prevent any other business from incorporating using that tradename. Therefore, to protect the brand that entrepreneurs are building. They should incorporate their business. Because then no other business will be able to utilize that name.
Another reason why people should incorporate their business as quickly as possible. Because they may want to limit their ability to be sued. Even low risk businesses, such as graphic designers and web designers have an inherent risk of being sued when they operate their business. However, higher risk businesses such as plumbers, and electricians. Have an extremely high risk.
And when they are incorporated, their corporation shoulders that liability. And it makes it much more difficult for people to access the directors of the Corporation. As well as their assets once they have incorporated their business. Therefore, all businesses, but especially high risk businesses. Should incorporate as quickly as they can. In order to protect their personal assets.
There are many other benefits of incorporating. And if entrepreneurs want to know all of the great information about this topic. They can set up a free consultation with their Vancouver accounting firm. And find out the benefits, as it relates directly to their business.
There are many things that entrepreneurs do not understand about being in business says Vancouver accounting firm. And according to into it, the makers of the accounting software QuickBooks. Only 11% of all entrepreneurs in Canada seek professional help when they need it.
Which means there are a lot of entrepreneurs who are making mistakes when it comes to their business. And not finding the experts that are going to be able to help them such as a Vancouver accounting firm.
When people who are operating their business as a sole proprietor are struggling. And are not seeking help, they may be running into problems simply because they need to incorporate their business. And they do not know it yet.
In fact, if people want to ensure that they have more money in their business. So that they can use more money towards things like paying bills, hiring more staff. Or even on the sales and marketing, to help them find more customers. They should incorporate their business.
The reason why says Vancouver accounting firm. Is because when entrepreneurs incorporate their business, they will immediately be paying a lower tax rate. And while the top personal tax rate in British Columbia is 53%.
Even entrepreneurs that are not paying the top personal tax rate in their personal finances yet. Are going to be paying more than 11%. Therefore, in order to protect their wealth, and ensure they have as much money in their business. They should incorporate, in order to pay fewer taxes.
Also, business owners need to understand that if they are going to be buying equipment in their business. They are going to want to incorporate. And the reason why, is because in order to purchase assets, an entrepreneur needs to first make money. And when they do that, they are going to have to pay taxes on that revenue before they can by their assets.
So when they incorporate, and pay lower taxes to Canada revenue agency. Then they are going to have more money to purchase assets faster in their business. And often, those assets are needed so that they can grow their business and succeed.
And finally, Vancouver accounting firm says entrepreneurs should consider incorporating. So that they can get accepted onto more job sites. By being able to get their own WCB number. As well as be hired on job sites, from companies who typically do not hire unincorporated businesses.
If business owners want to be legitimate, protect their tradename, limit their liability, and accumulate wealth for themselves and for their business. Corporation is the way to go. And the sooner entrepreneurs get their business incorporated, the sooner they are going to be able to succeed, and grow their business. If business owners have any other questions, they should talk to their accountant right away to find out more.